WASHINGTON (12/17/07)—The Senate Friday voted 93-1 in favor of legislation intended to modernize the Federal Housing Administration’s (FHA’s) mortgage insurance program. The House passed a version of an FHA overhaul in September, but that bill differs in significant ways from the Senate’s legislation—differences that must be worked out before Congress can approve a final measure. Among the difference, the Senate bill would increase FHA loan limits from the current $362,000 to a level similar to those of Fannie Mae and Freddie Mace, which are $417,000, according to Michele Johnson, director of federal legislative affairs for the Credit Union National Association (CUNA). The House bill, she noted, would raise the loan limit to 125% of an area’s median home price and would include authority for the House and Urban Development secretary to increase that amount by $100,000 in times of crisis in the home-mortgage market. The Senate bill also would lower the minimum down payment for an FHA-insured loan and simplify the down payment calculation. While the bills differ, reform to the FHA insurance program is seen by lawmakers in both houses of Congress as a way to provide for home buyers a low-cost alternative to subprime loan. Greeting news of the Senate’s action, House Financial Services Committee Chairman Barney Frank (D-Mass.) issued a statement noting the agreement in House and Senate that “ this is an important action in dealing with our subprime challenges, and that we should act quickly so that the FHA can be a resource for people who can refinance their loans.” He said he looked forward to working with the Senate, but added that he would work to preserve “important elements” of the House bill that differ from the Senate approach.